Sir Richard Kirby Lecture 2009


Firstly let me acknowledge the traditional owners of this land-the Dharawal Nation-and pay my respects to their elders past and present.

Sharon Bird Member for Cunningham; Professor Gerard Sutton Vice Chancellor University of Wollongong; Sir Richard Kirby’s daughters Ms Kate Barry and Ms Sue Kirby; Other distinguished guests, ladies and gentlemen.

First, let me convey the Acting Prime Minister’s sincere apologies for not being able to join you this evening.

When she accepted the invitation to give the Sir Richard Kirby lecture, a great honour, the Parliamentary calendar was clear. But as you know, politics is a moveable feast and there is a bit going on in Canberra right now.

So I am pleased to be here in Wollongong to present this lecture on the Acting Prime Minister’s behalf.

The life of Richard Kirby

I am delighted to be here to honour the memory of the late Sir Richard, an eminent Australian and an all-round good bloke who rightly remains a local hero.

Sir Richard Kirby had a deep and genuine love for labour law.

Australia’s labour law history is unique and so is Richard Kirby’s role in that history.

Sir Richard was born in 1904, in the same year that the Australian conciliation and arbitration system began.

He went on to become the longest serving President of the Commonwealth Conciliation and Arbitration Commission, a record of service from 1956 to 1973.

Since the early days of Federation, our industrial institutions have been at the heart of the Australian democracy — defending our society’s value of the fair go.

You see that in the Harvest Decision of 1907.

But there has always been fierce debate about that fair go.

The election of 1914, held after the first ever double dissolution of the Australian Parliament, was fought over industrial relations and produced the Fisher Labor Government.

Almost a century later, the 2007 election was fought over Work Choices and produced the Rudd Labor Government.

The fact that Australia’s commitment to an independent industrial umpire has weathered the storms of social and economic change is testament to the strong and positive contribution our industrial institutions have made for more than a century.

Sir Richard’s inspiring legacy of courage, independence and impartiality is a large part of that.

Why did he choose industrial law? Perhaps the answer is that it chose him.

His biographer Blanche d’Alpuget – a past presenter in this lecture series – suggests in her book that it was Sir Richard’s experience as the child of a broken home that helped him develop “the basis for his success as a conciliator later in life”(1). His parents’ marriage began to fall apart when he was 11.

D’Alpuget wrote that this tough experience strengthened his ability to cope with conflict and it matured into his unshakably even-handed approach in the most trying situations.

Prime Minister Ben Chifley recognised these abilities when he appointed Kirby as leader of the Australian delegation to pre-independence Indonesia.

In mediating between the Dutch colonialists and the Indonesians, Kirby was directed to give his opinion according to his conscience, even if that opinion was not consistent with goals of Australian foreign policy.

Chifley sent him on his way saying, “We know you’ll do the fair thing. Always do the fair thing and you can’t go wrong”.(2)

Kirby stuck to the same principles even when he was in the minority in the National Wage Case decision of 1965.

While people hold public office with the same rigorous integrity as Sir Richard Kirby did during his long career, our institutions will continue to command public respect and trust.

When the Hon Justice Michael Kirby presented this lecture in 2001-Sir Richard was still with us and able to attend-he put it this way:

“If you want the stuff of life and of conflict, passion and power, you have to look to industrial law, criminal law and family law”.(3)

It is the concern of the Labor Party for the “stuff of life” that drove us in fight to win the 2007 election, to end Work Choices and to create the Fair Work Act 2009.

Wage Setting

For millions of working Australians and their families, their wages are central to the “stuff of life”.

In his 1999 Sir Richard Kirby Address, former Prime Minister Bob Hawke said this about wages:

“By Kirby’s time the periodic national cases determining the basic wage were becoming the focal point for what has remained at the core of industrial relations debate in this country – reconciling demands for wage justice with the constraints of national economic management.”(4)

This debate over the role of the minimum wage and its economic impact on employment, inflation, productivity, and growth remains just as contentious today.

It’s not surprising.

Gender pay gap

But what is quite astounding is that debates about gender pay equity, begun in the Kirby era, are still going on.

As Blanche’s biography recounts:
“the economically disadvantaged position of women in the workforce had been of concern to individual members of the commission for many years…and [in] 1967 the bench decided to administer a stimulant”.

In April that year a wage margins bench that included Sir Richard announced “it seems industrially unjust that women performing the same work as men would be paid a lower margin”, and in June the national bench awarded the same increases to adult females and adult males.

The bench went on to invite the parties to study the question of equal pay and offered the commission’s services to arbitrate the matter, which ultimately led to the landmark 1969 Equal Pay case (which Sir Richard was unable to sit on due to poor health).

Unfortunately, 40 years on, despite the efforts of the Kirby bench, the gender pay gap is increasing.

Analysis of Australian Bureau of Statistics earnings data confirms that Australia has a persistent gender wage gap.

Between 1990 and 2009, the gender wage gap remained within 15 and 17 per cent.

The gender gap is even wider in some sectors: women in the finance and insurance sectors earn 24.7 per cent less than men.(5)

For women outside of white collar work, the story is just as bad.

Female technicians and tradeswomen earn 20.2 per cent less than men.(6)

Time and again, we see the link between male domination in the well-paid sectors of the workforce and low pay rates in female dominated sectors.

As a reforming Labor government, we are determined to see real progress made in closing the gender pay gap.

Equal remuneration provisions were first introduced in 1994.

Under Work Choices, the Australian Fair Pay Commission was given responsibility for applying the principle of equal remuneration for work of equal value in making wage setting decisions.

The AIRC also had power to make orders to ensure equal pay for equal value between men and women.

But this formulation did not provide a real opportunity to correct the undervaluing of feminised work or skills as it was such a narrow test.

Sixteen applications were made in the federal system for equal pay orders, but none succeeded.

The Fair Work Act 2009 has widened the test to include the right to equal pay for work of comparable value, as well as equal value.

This will allow applications to be brought and argued on a more reasonable and logical basis.

The Deputy Prime Minister announced last month that the Government will be an active participant in an important pay equity test case for workers in the social and community services sector being conducted by the Australian Services Union.

This sector employs more than 200,000 people – 87 per cent of whom are women.

This will be the first case to be considered under the new, enhanced provisions of the Fair Work Act.

This case will make history.

But even when this case has been fought and decided, there will still be more to do.

Just what that ‘more to do’ will be was made clearer last week, when the House of Representatives Standing Committee on Employment and Workplace Relations tabled Making it Fair, a comprehensive report into pay equity and associated issues related to increasing women’s participation in the workforce.

The Committee has made 63 recommendations to Government across a range of policy areas, including recommendations for:

• further legal reforms in workplace relations, superannuation and discrimination law;
• provision of assistance for organisations to make pay equity applications;
• the creation of a pay equity unit within Fair Work Australia;
• new reporting measures and the specialist data collection; and
• encouraging girls to move into training and jobs in non-traditional industries.

The Government appreciates the thoroughness and creativity shown in the Committee’s report, and congratulates Chair Sharryn Jackson MP for her leadership of this inquiry.

Senator Jacinta Collins has been appointed as a special adviser to the Deputy Prime Minister on pay equity and work and family issues and she will assist the Government to carefully consider all recommendations.

But in working on this policy issue I know the Deputy Prime Minister feels an immense sense of frustration.

It is both absurd and profoundly unjust that forty years after the 1969 Equal Pay Case, we are still talking about gender pay issues — that a substantial gender pay gap still exists, and indeed, that the gender pay gap is widening.

This Government will play its part in addressing this inequity, which is such a stain on our belief in the fair go for all.

Leadership is also required at the senior levels of corporate Australia to stamp out gender inequity, not only in the remuneration of employees, but also within corporate management.

Again it is with frustration and a sense of absurdity that I note that for all our progress in gender equality in other areas, women hold only two per cent of chief executive positions in Australia, and only 8.3 per cent of company board positions.(7)

Half of Australia’s companies have no women on their boards at all and only six per cent of senior management is made up of women.

We simply can’t allow another generation of women to be disadvantaged in the workplace this way.

Key reforms of the Fair Work Act

The need to modernise work place relations is not just about pay equity.

It is also about modernising the entire system itself.

Commencing with the announcement of our Forward with Fairness policy in the lead-up to the 2007 election, we have pursued a fundamental rewriting of the workplace relations laws to build a modern, flexible system suited to the needs of Australian workplaces in the 21st century.

Work Choices represented a fundamental violation of Australian values.

Coming out of that period, the challenge for us was to fashion a new way forward that promotes fairness and equity for employees, while recognising the economic imperatives facing employers in a modern, global economy.

Since November 2007 we have delivered:
• a modern employment safety net comprised of the National Employment standards and modern awards;
• an agreement-making framework based on good-faith bargaining at the enterprise level;
• a facilitated bargaining stream for low paid employees and their employers;
• the right for workers to be represented in the workplace;
• protection for all employees from unfair dismissal while recognising the special needs and circumstances of small business;
• individual flexibility arrangements that cannot disadvantage employees; and
• creation of Fair Work Australia and the Fair Work Ombudsman to implement the new system.

These new laws build on the 1993 Keating Government reforms which introduced enterprise bargaining and underpinned much of our subsequent economic success.

Fair Work Act reforms – the process

The system we have developed didn’t come about by osmosis or by accident.

It took time and hard work.

And it needed a genuine preparedness to listen, consult and negotiate with those affected.

We announced the core policy principles of the Fair Work Act in two tranches in the lead up to the 2007 election.

But fleshing out this framework into legislation was a major undertaking.

We established a range of new consultative bodies and forums and reinvigorated some existing ones to ensure we heard the full range of views on these issues.

Several advisory groups, representing small and large businesses from all sectors of the economy, unions and State and Territory Governments, worked with us to develop the policy detail.

Central to this process was an expanded Committee on Industrial Legislation, known as COIL, whose members spent a full two weeks locked in a Canberra office working through every provision of the draft Fair Work Bill.

55 experts – with somewhere approaching 1000 years of industrial relations experience between them -worked through the draft legislation line by line over a 10 day period.

Fuelled by lots of pizza and Coca-Cola, by the end of the two weeks Julia tells me souvenir t-shirts were being designed with the label ‘IR Nerd-fest 2009′.

We did all of this because we wanted to get the details of our workplace relations policy and the Fair Work Act right.

I hope Sir Richard would have approved. In 1981, he welcomed the establishment of the Ministry of Labour Advisory Council, remarking:

“This is to the good – both sides of industry represented and with access to the Minister. But again this Council brings people on opposite sides together but, in our hectic life, is concerned with machinery, policies and particular problems rather than the vague but essential search for goodwill in industry”.

Governments as we well know are not the font of all wisdom.

The process of government works best when it draws on the ideas, views and expertise of all those willing to bring those ideas to the table.

And of course, governments must always be conscious of the need to make sure that the services it provides meet the needs of those who are unrepresented in policy development.

In the case of workplace relations, that means giving careful thought to the users of the system who don’t have an institutional voice, to make sure the system works for them too.

It is why, for example, we have ensured that the new system has simplified processes, an easy to access website and phone number and lots of simple, plain English information.

This was also part of the thinking behind award modernisation. Creating 121 simple, streamlined modern awards from over 4,000 instruments that currently exist means ordinary people – small business owners, young people, mums and dads – can easily find out their rights.

Of course, in a highly contested policy area like industrial relations, we recognise that there will always be differences of opinion.

But from our view, we believe the consultation process was highly effective in getting us the Act we have today that has achieved broad community acceptance.

Next challenges for reform

The Government is sometimes asked why its reform agenda is taking time.

Treasurer Wayne Swan recently expressed his frustration with the constant questions about reform: “Everyone says they want long-term reform but they don’t want it to take very long”.

Reforms that are worthwhile come about through rigorous, evidence-based policy development.

And that takes time.

They need consultation and collaboration with the community.

But we know that some reforms are taking far too long.

We know that there are times when all the talking has been done, all the reasonable views are known and responded to, when all that remains is political will and to get the job done.

The fate of the Carbon Pollution Reduction Scheme, one of, if not the most important environmental and economic reforms in our nation’s history, is tonight held captive by the Senate.

It is time for the Opposition to respond to the will of the Australian people, to respect the agreement made with the Government for amendments and to pass the CPRS legislation.

The Senate is also holding the fate of another critical national reform in its hands, that’s the bill that will complete the national workplace relations system for the private sector.

At this stage, the Opposition has indicated it will oppose that Bill.

With the disarray in the Liberal Party and no Opposition Senate Leadership in place, it is unclear whether the Opposition will even support its debate this year.

If the Bill is not passed this week, there is a grave danger that the creation of the national system will fail.

Let’s look at how long we have been talking about this particular reform.

The Hancock review back in 1985 noted the ‘basic attractions’ of a single system but wondered how the trip towards that goal might be made.

Having considered the options, it concluded that it would not be practical in anything but the long term.

That view turned out to be somewhat prescient!

The previous Government used the corporations power of the Constitution to secure a national system, but left 15-20 per cent of the private sector still in state systems, or worse yet, in a state of jurisdictional uncertainty not knowing what system they belonged in.

The previous Government was unable to achieve a national system because Work Choices was too divisive.

Over the past two years, the Rudd Government has worked collaboratively and cooperatively with the States and with employer groups and unions to deliver a national workplace relations system for the private sector.

This has taken time, tenacity, hard work, negotiation, compromise, give and take, and good will in various quantities in order to build a consensus for change and to finally deliver the national system.

We have even seen the strength of that consensus last Friday with a joint national media release from the Australian Chamber of Commerce and Industry, the National Farmers’ Federation and the ACTU calling on Senators to support the Bill.

These are not three names you would often see on one document united in their calls to the Parliament, but this just goes to show that this is a reform whose time has well and truly come.

The only thing that remains to be seen is whether the implosion of the Liberal Party this week will stand in the way of achieving it.

Concluding remarks

It has been a big year in workplace relations.

The passage of the Fair Work Act 2009 and its commencement on 1 July has brought a new era of fairness and balance to our nation’s workplaces.

As we meet here tonight, we are tantalisingly close to completing the three core elements of our micro-economic reform agenda in workplace relations:

• The fate of the national workplace relations system for the private sector hangs in the balance in the Senate.
• The final agreement for harmonisation of occupational health and safety laws between the states, territories and the Commonwealth is only a few short weeks away.
• And on 1 January 2010, modern awards will commence. More than 4,000 state and federal instruments will be reduced to just 121 simple modern awards.

Award modernisation is an extraordinary achievement and one that is very much to the credit of His Honour Justice Giudice, the members of the Commission and all those who have laboured in this essential reform. It hasn’t been an easy task, but then we know that nothing that is really important and worth doing is easy.

It’s been a big year, but there is plenty more to do in workplace relations in 2010.

We have more to do to make sure that the new system is understood and implemented effectively.

We have more to do to make sure that the rates of pay and payment methods in the transport industry don’t push drivers to speed, drive excessive hours or scrimp on vehicle maintenance, just to make a living.

We have more to do help parents and carers better balance their work and other responsibilities.

We need to make sure government funds are expended on businesses who do the right thing and comply with their obligations towards their employees.

We need to make sure that apprenticeship and training arrangements are working well to deliver the skilled workers Australia needs.

We have got more to do to work with business and union leaders to really embed a new culture of cooperation and innovation in our workplaces.

We have got more to do to create new workplace leadership skills to help lead the innovative, fair, productive, cooperative and sustainable workplaces that we want for our workplaces of the future.

So as you can see we have a big agenda – and there is lots of work ahead.

Thank you

1.Blanche d’Alpuget, Mediator: A biography of Sir Richard Kirby, (Wilke and Company Ltd for) Melbourne University Press, 1977, p 7
2.Ibid, p 71
3.The Hon Justice Michael Kirby, “Sir Richard Kirby and a Century of Federal Industrial Arbitration”, Sir Richard Kirby Lecture 2001, University of Wollongong
4.Bob Hawke, “The Life and Work of Sir Richard Kirby – what does it tell us for the issues of today?”, Sir Richard Kirby Lecture 1999, University of Wollongong
5.See , p.8 (accessed 2 November 2009)
6.See , p.8 (accessed 2 November 2009)
7.29 October 2009, Elizabeth Broderick, ‘Make room at the table for women,’ Australian Financial Review, 71